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The Existence and Composition of Audit Committees in the New Zealand Public Sector
Author(s) -
Rainsbury Elizabeth A.,
Malthus Sue,
Capper Patsie Anne
Publication year - 2012
Publication title -
australian accounting review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.551
H-Index - 36
eISSN - 1835-2561
pISSN - 1035-6908
DOI - 10.1111/j.1835-2561.2011.00146.x
Subject(s) - audit committee , audit , accounting , chief audit executive , business , joint audit , government (linguistics) , public sector , debt , independence (probability theory) , audit evidence , composition (language) , internal audit , finance , political science , law , linguistics , philosophy , statistics , mathematics
This study investigates the association between the source of funding of New Zealand public‐sector entities (PSEs) and the existence and composition of their audit committees. We examine 134 PSEs in the health, local government and tertiary sectors. Of these PSEs, 81 (60%) have an audit committee. The size of the audit committees are on average larger than recommended by best practice guidelines. However, most of the PSEs comply with guidelines recommended for audit committee independence but not financial expertise. PSEs with higher levels of government funding are more likely to establish audit committees and PSEs that rely on funding from rate payers and debt providers are more likely to have audit committees with a majority of independent members. There is no support for the association between the source of funding and the level of financial expertise on audit committees.